Youth in agribusiness: shaping the future of agriculture Brussels Briefing 49: Youth in agribusiness: shaping the future of agriculture Presentation Maness Ngoma Nkhata, Lakeshore Agro-Processing Enterprise (LAPE), Malawi “Youth Participation in agro-processing in Malawi”

LAKESHORE AGRO-PROCESSORS ENTERPRISE (LAPE) YOUTH IN AGRIBUSINESS: A CASE STUDY OF LAKESHORE AGRO-PROCESSORS ENTERPRISE(LAPE)   MANESS NKHATA Managing Director, LAPE E-mail: lape.factory2007@gmail.com maness.nkhata2013@gmail.com Cell: +26599005333 MAY, 2017

OUTLINE OF PRESENTATION INTRODUCTION BUSINESS FOCUS HOW LAPE INVOLVES THE YOUTH? MAIN ACTIVITIES APPROACH TO ENGAGE YOUTH AND WOMEN ADVANTAGES OF WORKING WITH THE YOUTH AND WOMEN CHALLENGES FUTURE PLANS YOUTH AGRI-ENTREPRENEURSHIP FOR JOB CREATION (YA-JC) PROGRAMME PLANS

INTRODUCTION …..MALAWI UNEMPLOYMENT STATISTICS…. Youth Unemployment in Malawi (as a percent of total labour force aged between 15-24) It’s rising Source: ILOSTAT

INTRODUCTION Malawi has over 1.3 million young people who are unemployed (NSO IHS3,2012) Unemployment rate is in Malawi at 18.9%. Of those that are unemployed, 25% are young women and 12.5% are young men (ILO,2013). Main sources of youth employment in Malawi: 47.2% in subsistence agriculture 27.4% in retail trade 10.3% in manufacturing (ILO, 2013).

INTRODUCTION The Government of Malawi has implemented policies to support technical, entrepreneurial and vocational skills development for the youth through the establishment of institutions e.g. TEVETA, YEDEF, SMEDI. Evaluations of programmes of some of these institutions have shown that they have had no impact on overall labour market outcomes (AfDB, 2014). None of these institutions focuses on transforming the subsistence nature of agriculture to make it a key source of gainful employment to youthful job seekers. LAPE therefore focuses on filling in these gaps so as to create employment opportunities for the youth.

LAKESHORE AGRO-PROCESSORS ENTERPRISE(LAPE) Registered youth owned agro-processing enterprise. Started in 2007 Located in Chitipi Trading Centre, Lilongwe City. Established on 1.5 ha of its land along the Lilongwe-Mchinji road in Chitipi. Works with rural farmers as business partners and not beneficiaries Uses innovative and self-sustaining contract farming models in soybean, sunflower, groundnuts and cassava production

BUSINESS FOCUS SINCE 2007 VISION: MISSION: SPECIFIC OBJECTIVES TO BE A LEADING AND TRUSTED SUPPLIER OF AGRO-PROCESSED PRODUCTS FOR HUMAN AND LIVESTOCK CONSUMPTION. MISSION: TO BE A STEADY SUPPLIER OF HIGH QUALITY AGRO-PROCESSED PRODUCTS THAT MEET CONSUMER DEMAND AND PREFERENCES AT AFFORDABLE PRICES. SPECIFIC OBJECTIVES To champion value addition of local agricultural commodities using efficient processing technologies. To supply high quality agro-processed products at fair and competitive price. To transform rural farmers into commercial producers through business partnership contract farming model. To pioneer youth agri-business entrepreneurship through agro-processing incubation services. To increase and diversify income for rural youth and women through creation of off-farm jobs.

ORGANISATIONAL STRUCTURE OF LAPE

HOW DOES LAPE INVOLVE WOMEN AND YOUTHS? Deliberate targeting of women and youths to register as our business partners. Provision of farm inputs loans (certified seeds, inoculants, herbicides) on contract farming basis. Using LAPE extension officers to provide GAP services to the youth and women. Hosting university interns to expose them to agribusiness and entrepreneurship. Provision of business, entrepreneurship and leadership skills training to youth and women business partners. Offering a ready market for farm produce using signed purchase agreements.

MAIN ACTIVITY 1: SUPPORTING YOUTH AND WOMEN TO INCREASE CROP PRODUCTIVITY Mobilising youth and women into crop production associations: Mkanda Soybean Producers Association – 2,400 members; 54% women; 30% youth. Kakoma Estate Sunflower out-grower scheme – 3,411 members; 60% women; 40% youth. Mikute Cassava Producers Association - 4,290 members; 35% women; 55% youth. Working with youth and women as ‘business partners’ and not ‘beneficiaries’: Revolving fund farm input loan for improved seeds, inoculants, chemicals and herbicides. Extension services using Lead Business Partner Model. Training on Good Agriculture Practices (GAP).

MAIN ACTIVITY 2: PROCESSING OF SOYBEAN, SUNFLOWER AND CASSAVA 1. Providing market for raw cassava, soybean and sunflower Income to farmers/transporters/wage earners 2. Improving quality of processed products Value addition Packaging Standards 3. Expanding processing capacity to offer good market to farmers Installation of new processing machines 4. Providing permanent and temporary jobs for youth and women Members of staff (52% female) Temporary workers (80% women) Hosting university interns

MAIN ACTIVITY 3: DEVELOPING YOUTH AGRI-ENTERPRENEURSHIP SKILLS Provides land to youths and women who do not have land for out-grower scheme with Kakoma Estate. Provides ready market for youth and women who produce cassava, soybean and sunflower. Provides opportunity for interns to be exposed to agro-processing to develop their entrepreneurship interest and skills. Provides agri-business incubation services so that the youth and women become entrepreneurs. Supports tree seedlings production as a business for youth and women to contribute to climate change mitigation.

DRIVERS TO SUCCESS FOR LAPE Using already existing groups through ADCs. Involving other stakeholders, e.g. Ministry of agriculture, gender, trade, religious organization, etc. Using intensive public awareness campaign. Provision of support through farm inputs loans and extension services. Using success stories from peer business partners that previously worked with LAPE.

WHY LAPE WORKS WITH THE WOMEN AND YOUTH? Good recovery of farm inputs loans – high repayment rates – over 75% per season. Stability of women and youths groups – maintain the groups over seasons. Women and youth are dedicated and hard working in farms with low default rates. High cooperation to implement new GAP and adopt new technologies.

CHALLENGES Cultural norms and practices that tend to underrate women and youth. Low contribution of women and youth during meetings - passiveness. Limited access to factors of production such as land, capital, technology, etc by women and the youth. Provision of handouts by other stakeholders in the same groups which discourages others to adopt business approaches.

CHALLENGES Limited capital for LAPE to: Invest in large processing equipment Expand the revolving farm input loans Expand the internship programme Low production capacity to meet demands of large customers Current production is 5 metric tons of HQCF per month Vs at least 50 metric tons per month which is imported by large customers

FUTURE PLANS TO GET LAPE TO NEXT LEVEL Procurement of flash dryer Create 50 direct jobs and over 200 indirect jobs Increase intake of interns hosted from 20 to 50 per year Establish incubation centres Equip youths with entrepreneurial skills Provide youths with capital to start up their business Establishing Cooperative Development Fund (36 months) To sustain activities of business partners

YOUTH AGRI-ENTREPRENEURSHIP FOR JOB CREATION (YA-JC) PROGRAMME PLANS Reorient 10,000 youth agri-entrepreneurs towards more engagement of commercial agriculture and market oriented value addition as sources of gainful employment. Provide agribusiness incubation services to 10,000 youth agri-entrepreneurs so as to create gainful employment in commercial crop and livestock farming and agro-processing

YOUTH AGRI-ENTREPRENEURSHIP FOR JOB CREATION (YA-JC) PROGRAMME PLANS Identify, test and promote at least 5 viable agribusinesses value chains with short time payback periods for commercial upscaling by youth agri-entrepreneurs. Establish at least 5 viable strategic alliances and partnerships among key stakeholders in the value chains of interest to the youth agri-entrepreneurs. Create independent youth agri-enterprises that will commercialize the production, processing and marketing across the value chains of cassava, soybean, sunflower, pigeon peas, organic horticultural crops, bee keeping, poultry, goats and other non-traditional small stocks.

INTERNS AT SOYBEAN FARM IN MCHINJI

INTERNS AT A SUNFLOWER FARM IN KASUNGU

LAPE WITH CASSAVA FARMER

CASSAVA PROCESING AT LAPE

UNIVERSITY INTERNS AT AFRICAN UNION TRADE FAIR

UNIVERSITY INTERNS AT AFRICAN UNION TRADE FAIR

NEW COOKING OIL FACTORY BEING CONSTRUCTED

NEW COOKING OIL FACTORY BEING CONSTRUCTED

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